According to Ernst & Young’s Renewable Energy Country Attractiveness Indice, Bulgaria is among the most attractive countries for investment in green energy. China, U.S. and India are topping the list. Bulgaria is one of the 35 countries with the most attractive conditions for investment in green energy. This is the first time that Bulgaria is included in this indice alongside with Morocco, Taiwan and Chile. The last few months have been quite confusing for the world markets for renewable energy. The riots in the Middle East and North Africa brought to attention the importance of the sustainability of energy supply and the price fluctuation of oil. Meanwhile, the nuclear disaster in Japan made some governments raise their expectations on renewable energy.

Bulgaria ranks 32nd in the Renewable Energy Country Attractiveness table, ahead of Austria, Chile and the Czech Republic. Although Bulgaria is not among the leading countries in these rankings, we should consider the fact that the attractiveness indice is developed for the most attractive countries producing green energy worldwide. Thus, this entry of Bulgaria into the index is positive news. Since 2007, there has been a remarkable growth in the production of renewable energy – just last year it has increased by 67%. The new law on renewable energy, though controversial, comes with the ambition to make the growth of green energy sustainable.
But still, why 32nd?

The new law is keeping the old system – it is based upon preferential rates for buying and building the energy plants for the entire duration of the contract. The exact price remains uncertain because it is calculated at the end – when the energy plant is built.

This ambiguity creates uncertainty among investors because it makes them unable to calculate the return on their investment before the real plant is built.

However, the government argues that the new law will create conditions for sustainable long-term growth. That combined with the natural conditions and the lower operating costs will turn Bulgaria into an attractive market in the distant future.

Investments in Bulgaria are finally starting to grow. According to preliminary data from the Bulgarian National Bank for the first quarter of this year, there have been 236.8 millions (0.1% of GDP) invested in Bulgaria, in comparison to 42.2 millions for the period January - March in 2011.

During previous periods the negative investments were most often due to inter-company loans between companies and their parent companies abroad, as well as liquidated liabilities of banks to foreign creditors. This means that for the period of one year the direct foreign investment has increased by 279 millions EUR. Furthermore, the final data figures are usually presented higher than they actually are. For January - March in 2012 the net capital (the change in net liabilities of the companies with foreign participation and the direct foreign investors on financial, contractual and commercial credits) was positive, 38.6 millions, compared to the negative – 299.3 millions for January - March in 2011. Just for March the Bulgarian economy received 61.6 millions compared to -375.4 millions for the same month last year.

Nonresidents invested in real estate around 44.9 millions, in comparison to 37 millions last year. Reinvested earnings, however, decreased to 17.9 millions EUR compared to 24.8 millions EUR. For the first quarter of 2012, most investments have come from the Netherlands (257.1 millions) and Switzerland (98.4 millions). The most funds have passed to Germany (-152.3 millions), Greece (-61.8 millions) and Britain (-49.9 millions), mainly due to payments on intercompany loans and sales of fixed assets.

The most investment was attracted to the energy sector - 118.9 million EUR, while there was registered a leak of 35.2 million EUR in the real estate operations, renting and business activities . Bulgarian investments abroad was increased by 20.7 million BGN in growth from 44 million in early 2011.